16 January 2020
- Renewables (namely wind) are predicted to significantly decrease into week 4. The drop could be short-lived, however, as westerlies are forecast to pick up in 7/8 days from now. Precipitations will follow a similar trend, starting on a low side but gradually increasing towards the end of week 4 (mainly northern and eastern Europe). Our Precipitation Index remains weakly positive. French outages continue to be abnormally high (i.e. 2/3 GW higher than what originally planned) and are expected to remain so for the next weeks.
- Although not as high as week 3, temperatures will stay above the average of the period over Germany. Lower values should be observed over western Europe. As a result, the predicted demand will continue to disappoint (i.e. <65GW against the 67GW normally recorded during this period of the year). Capacity Utilization of fossil fuels is predicted to increase, but mainly to meet the expected ramp up in seasonal demand (a small part will also be due to the shortage in renewables, see the short-term supply commentary).
- Although we continue to see weak signs of recovery in the macroeconomic activity, the trend is very slow and its magnitude small. Specifically, while the November Industrial Production Index showed less negative value, the latest PMI confirmed a grim outlook and are not promising for the final Q4 figure. When down to the single segment, both chemical and cement production exhibited a positive month-on-month trend.